March, 26 2008
Indian steel makers offer to restrict exports
It is reported that Indian steel majors, including private players, have offered to curtail steel exports to the Indian government to ensure domestic supplies. As per reports, Indian major steel producers under the banner of Indian Steel Alliance, during a meeting with Mr RS Pandey steel secretary gave an undertaking to voluntarily halt exports to augment domestic supply and check the rising steel prices.
Mr Moosa Raza president of Indian Steel Alliance told media that "Steel producers today met the top brass of the steel ministry and conveyed that they also shared the government's concern on rising prices and its impact on the common man. Accordingly, we have assured them that we will exercise self restraint on export of steel products with immediate effect to enhance domestic availability of steel.’
Mr Raza however clarified that the curb would not apply to existing contracts.
It was earlier reported that the steel ministry had forwarded a proposal to the finance ministry to abolish the 5% import duty on steel products to curb prices and another proposal of levying an export duty of 10% on steel products was being considered. The move is aimed at placating the government.
India exports approximately 5 million tonnes of steel a year and the major component is coated products, where the capacity is in excess to the demand.
BPSL commissions new HSM on Indian soil after gap of a decade
It is reported that Mr Sanjay Singal led Bhushan Power & Steel Limited’s Greenfield steel plant near Jharsuguda town of Sambalpur district of Orissa has rolled out first hot rolled coil out of its newly installed state of the art HSM, supplied by SMS of Germany, on March 25th 2008 after undertaking cold trials on March 20th 2008.
The HSM will roll HRC in thickness range of 1.2mm to 12.7mm in widths range of 800mm to 1350mm. The capacity of HSM is 1.2 million tonnes per annum, which will be enhanced to 1.8 million tonnes per annum with the addition of one more caster.
Mr. VR Sharma joint MD of BPSL on the occasion said that “After a gap of more than a decade, a new hot strip mill has been commissioned in the country. This is a great achievement for the entire nation. Our team and the teams from SMS, Siemens and other suppliers have done a great job.”
Mr Sharma added that “The mill has come in to production at the right time because there is an acute shortage of HR coils in the country and there will be some sigh of relief to the steel users with the addition of this mill in India.”
Mr Sharma also justified BPSL’s demand of captive iron ore mines for this plant. He said “BPSL is the largest investor in the state of Orissa in the recent times. Hopefully, government of Orissa and government of India will look in to the matter and will make the iron ore mines available to BPSL very soon on the basis of their performance.”
BPSL under the leadership of CMD Mr Sanjay Singal has been working very sincerely and swiftly to bring this dream project true. BPSL is setting up an integrated steel plant with facilities like sponge iron making, coke oven, sinter plant, blast furnace, electric arc furnaces, induction furnaces, slab caster and hot strip mill. All of the facilities including captive power plant and a railway siding has been commissioned fully.
Ford seals sale of Jaguar and Land Rover to TATA Motors - FT
FT reported that Ford Motor has signed an agreement to sell Jaguar and Land Rover to TATA Motors in London and that Ford Motors will announce details of the deal today
The report cited a person close to the deal as saying that “Ford has signed an agreement sealing the deal, worth about USD 2bn, but is withholding making it public until it had briefed the two carmakers’ employees. Ford is expected to make an announcement before markets open in the US on Wednesday.”
Financial Times said that a Ford spokesman declined to comment by saying that “We will not confirm anything until we have communicated any significant development to our employees.”
The auction, news of which became public last June, has been long running as Ford and its bankers, Goldman Sachs, Morgan Stanley and HSBC, winnowed down a long list of bidders that formerly included several buyout groups and rival carmaker Mahindra & Mahindra and hammered out commitments on both sides seen as crucial to the two brands’ future.
TATA Motors has also stayed quiet on this report. Mr Debasis Ray spokesman of TATA Motors said "We are in talks, we have no guidance to give at this time.”
Kalinga Nagar tribals to intensify stir against TATA Steel plant
SNS reported that tribals of Kalinga Nagar in Jajpur district of Orissa have threatened of mass agitation against the indifferent attitude of Orissa government towards their seven point charter of demands. As per report, hundreds of tribals who gathered at Ambagadia, the cremation ground where 14 of the firing deceased were mass cremated to decide their future course of action charged the Jajpur district administration and the Mr Naveen Patnaik government of being puppets at the hands of multinationals and working against the interests of tribals.
Mr Rabindra Jarika general secretary of Visthapan Virodhi Janamanch said that “The police and the district administration had assured us to arrest the accused involved in the March 13th 2008 firing incident this month in which one of our close associates Jogendra Jamuda was injured. But nothing has happened so far. It means the police are encouraging a particular steel company to attack our supporters to weaken our movement that was aimed at protecting our lives and livelihood sources.”
Mr Jarika warned that “We would not allow TATA Steel authorities enter the proposed steel project until the issues on rehabilitation and resettlement are fully resolved. Those who were earlier displaced by various projects in Kalinga Nagar are yet to be properly rehabilitated. We will never go by the false promises made by the company officials and government.’
Visthapan Virodhi Janamanch is a forum of the Kalinga Nagar tribals who have been leading anti displacements agitation in the steel hub since January 2nd 2006 where 14 tribals were killed by police bullets during construction of boundary wall of TATA Steel's proposed steel project.
Leighton bags USD 720 million ONGC pipeline contract
Australian construction and mining major Leighton International has bagged a USD 720 million contract from Oil & Natural Gas Corporation for the construction of offshore pipelines in India.
The project, Pipeline Replacement Project 2 involves engineering, procurement and installation of over 200 kilometer of fixed and flexible pipelines of various diameters in the Mumbai High field some 80 kilometer off the coast of Mumbai.
Offshore works on the project will commence in November 2008 and will take place during the period from November to May each year for the next 3 years. Stage one will be completed by May 2009, stage two in 2010, and stage three in 2011.
Mr David Savage MD of Leighton International said that the new project underlined Leighton’s oil and gas credentials and further consolidated the company’s operations in India. He said “Our capabilities in oil and gas have been strengthened over the years and this project for ONGC is testament to this. This is the second Pipeline Replacement Project being launched by ONGC with more expected in the coming years. This is indicative of the type and scale of oil and gas opportunities available to the company within the region.”
He added that “The project pushes our work in hand to a record USD 3.2 billion. We expect to be able to further increase this figure over the next few months, with the conversion of a number of good prospects in the Arabian Gulf. India continues to be a key market for Leighton International and we see further opportunities in oil and gas. We also have strong prospects in transport infrastructure particularly roads and rail, residential, industrial and commercial building, and contract mining.”
Leighton’s oil and gas division in India has grown considerably over the past year following the completion of two oil pipeline projects in India for Reliance Industries and Kochi Refineries. The company has its own marine fleet which includes the pipelay barge, “Stealth”, and crane barge, “Mynx”.
Mr Koda assures of an amicable solution to the Chiria
Ranchi Express reported that in first indication of softening of stand on Chiria mines, Mr Madhu Koda chief minister of Jharkhand said that the state government is in favor of finding an amicable solution to the Chiria imbroglio through dialogues.
Mr Koda said that "We want an amicable solution to the Chiria impasse through dialogue and hope that the matter would be settled soon.”
He, however, expressed his ignorance about the formation of a 3 member joint panel of the state and centre in this regard. He said “I am, however nor aware of any 3 member panel being formed for the purpose as of now. Since the matter is under the sub judice, it would not be proper for me to comment any more."
Indian forms panel to study coal transportation thru waterways
BL reported that India’s Planning Commission has formed a new committee to assess the feasibility of coal transportation through waterways and recommend measures for encouraging coastal power projects based on domestic and imported coal transported through waterways. The committee will submit its report to the Planning Commission by June 2008.
The committee will go into the status of existing waterways, including inland waterways; capacities of loading and unloading facilities, port infrastructure; potential to create additional capacities for coal movement; potential to transport other commodity on return way and recommend ways to avoid cross transportation and multiple handling coal. The committee will also look into integration of coal movement through waterways with existing and proposed rail and road network; techno-economic assessment of alternative modes of coal transportation.
The committee is headed by Mr Kirit Parikh member energy of Planning Commission. Other members in the committee include secretaries from the ministries of coal, power, shipping, and environment and forests; chairman of Central Electricity Authority and member traffic of Railway Board. Representatives from the maritime boards of Tamil Nadu, Kerala, Andhra Pradesh, Maharashtra, West Bengal, Orissa and Gujarat are also in the committee. Ms Mridula Krishna a transport economist & analyst and Mr SS Rangnekar MD of Sical Logistics are also in the committee.
As per report, transport based on inland waterways or inland water transport comprising of rivers, canals, lakes and coastal shipping constitute around 20% of the transport sector in Germany and 32% in Bangladesh but in India, it is only 0.15%.
Jyoti Structures bags 2 TLT orders I Africa
Jyoti Structures recently announced that it has bagged 2 orders worth INR 253 crore from Uganda Electricity Transmission Company Limited and Eskom Enterprises Pty Limited for construction of transmission lines.
Jyoti Structures has been awarded an order for Supply & Erection of Bujagali Interconnection Project for construction of 220KV and 132KV Transmission Lines and Substations from Uganda Electricity Transmission Company Ltd. The contract valued at approximately USD 39.64 millions (INR 160 crores) is to be executed in 24 months.
Jyoti Structures Ltd through its JV Jyoti Structures Africa (Pty) Ltd has been awarded a contract for execution of 114 kilometers of 765KV Single Circuit Transmission Line Construction from Majuba to Umfolozi by Eskom Enterprises (Pty) Ltd, the electricity utility of South Africa. The Contract valued at approximately ZAR 184 millions (INR 93 Crores) is to be executed in 13 months.
Indian cement firms buying ships for coal transportation
Reuters reported that Indian cement and power firms are buying bulk carriers to combat rising freight costs and long queues for ships, while eyeing a new revenue stream by putting these vessels in the market when idle. A steep rise in freight rates last year prompted some Indian firms, which depend a lot on imported raw material, to buy vessels or expand their fleet, while others entered into long term contracts.
Mr VM Mohan VP corporate finance of India Cements, which imports 800,000-900,000 tonnes of coal annually from Indonesia and has bought two dry bulk vessels earlier this year, told Reuters that “In the dry-bulk segment, freight rates are going through the roof and we also find it difficult at times to find ships. We don’t want to take chances.”
Mr Mohan said that “It has paid as much as USD 45 per tonne to USD 50 per tonne as freight charges, while the vessel operating cost was USD 12 per tonne USD 15 per tonne. Now, we do not need to on the market for ships.”
The Baltic Exchange’s chief sea freight index for global raw material trade, which monitors 40 major export routes, soared nearly 150% between January and November 2007.
Algoma announces change in fiscal year end
Algoma Steel Inc announced that effective from March 31st 2008 it has changed it fiscal year end from December 31st to March 31st.
Algoma Steel will report audited results for the three month transitional period of January 1st 2008 to March 31st 2008 in May, 2008. The Company’s fiscal quarters will end on the last day of June, September, December and March each year. The Company has taken this step to align its fiscal year with that of the Essar Group of Companies.
CIL to meet deadline of new coal distribution policy
Coal India Limited has announced that it will implement the new coal distribution policy finalized in October 2007, within the stipulated deadline of April 18th 2008.
Mr K Ranganath marketing director of CIL said that "We will meet the deadline for implementing the new coal distribution policy within the deadline of April 18th 2008."
Mr Ranganath said that under the policy, CIL will sign fuel supply agreement with all the coal consumers requiring above 4,200 tonne per annum.
He added that "The final fuel supply agreement for the power utilities and fertilizer companies will be sent to consumers by April 15th 2008. While, the model fuel supply agreement for non power and fertilizer companies has already been sent for signing."
He said that existing consumers requiring below 4,200 tonnes of coal per annum could sign the fuel supply agreement and for new consumers a new policy had been introduced by which CIL would sign fuel supply agreement with the respective state appointed agency who would supply coal at a fixed price. He added that "Already 8 states have expressed interest to sign the fuel supply agreement through their respective agencies."
Credit rating agency CRISIL has been appointed by CIL to draft the model fuel supply agreement and based on final comments from consumers, the final fuel supply agreement would be finalized.
Hitachi and Sumitomo to upgrade Bhakra Beas power plant
Sumitomo Corporation and Hitachi Ltd have secured a lump sum contract worth approximately JPY 9 billion from Bhakra Beas Management Board to supply, replace, install and or renovate the major plant components of the Bhakra Left Bank Power House in January 2008.
Bhakra Left Bank Power House has a total capacity of 540 MW from 108 MW x 5 water turbines and generator units. The power house is located within the Bhakra ravine region in the state of Himachal Pradesh in the north of India.
The existing power house consists of water turbines built by Hitachi, Ltd and generators manufactured in England. 46 years after the commencement of operations, the aged equipment is now in need of renovation and must be upgraded to meet the increasing demand for electric power.
In order to support this project, Sumitomo Corporation has formed a project consortium with Hitachi Ltd and VA Tech Hydro of Austria, which will complete the renovation contract by the end of 2012. Of the major pieces of equipment, the water turbines and the generators will be manufactured, delivered to the site and installed by Hitachi Ltd and VA Tech Hydro respectively.
Under the contract the capacity will be increased to 630 MW comprising of 126 MW x 5 water turbines and generator units.
SAIL SSP conducts free medical camp
It is reported that Steel Authority of India’s Salem Steel Plant has conducted a medical camp under its corporate social responsibility activities at Poolampatti village in Tamil Nadu. Mr TK Mazumdar GM at SSP inaugurated the camp in the presence of the Panchayat president Mr K Arumugam and other officials.
Around 700 patients covering all age groups were examined at the camp. Medicines were given free of cost to the patients. Apart from routine ailments such as fever, respiratory tract infection etc, specific advice was given to the patients who were in need of further investigation and treatment.
Later, medical cards were issued to the patients. These cards give personal details and medical information such as weight, blood sugar, blood pressure reading, diagnosis of the ailment, treatment given along with medical advice.
CIL to sell 15 million tonne coal in forward e auction
Reuters reported that Coal India Limited is planning to sell 15 million tonnes of its targeted 405 million tonnes of coal production in 2008-09 through forward electronic auction to be introduced in March 2008.
Mr K Ranganath marketing director of CIL said that the scheme is aimed at meeting the long term fuel requirements for cement and steel firms on a quarter to quarter basis. He added that the new system follows the introduction of spot electronic auction of coal through which the firm proposes to sell 25 million tonnes of its produce in 2008-09.
Ranganath said that Coal India Limited, which supplies 90% of its produce at a fixed price to power firms in India, will finalize fuel supply agreements with existing users by May 2008. He added that it has earmarked 140 million tonnes of coal for new units and 8 million tonnes of coal through state-run firms to meet demand from small industries.
CIL has a target to produce 380 million tonnes of coal in the current financial year and will offer better quality coal through forward e auction.
Chhattisgarh earns INR 7 billion in mineral royalty
IANS reported that Chhattisgarh has earned around INR 7 billion royalty on coal, bauxite and iron ores during April to December 2007 period. It earned INR 8.32 million royalty revenue in the last fiscal year 2006-07 and INR 7.37 million in fiscal 2005-06.
Officials of the state directorate of mining said that the state has net up INR 6.95 billion till December 2007. They claimed that the total revenue receipt on minerals would be well over INR 9 billion in the current fiscal when the final calculation is made after March 31st 2008.
Coal and bauxite abundant Korba district topped the list of highest revenue contributor till December 2008 with INR 3.71 billion followed by Korea and Raigarh districts with INR 940 million and INR 558 million respectively.
GAIL targets 81.5 MMSCMD of gas transmission in 2008-09
GAIL India Limited has signed annual memorandum of understanding with the government of India for performance targets of GAIL for the Financial Year 2008-09.
The MoU was signed by Mr MS Srinivasan secretary at union ministry of petroleum & natural gas on behalf of government of India and Dr UD Choubey CMD of GAIL on behalf of the company. Senior officials from the government and directors of GAIL were also present on the occasion.
During the Financial Year 2008-09, to achieve the excellence in performance, GAIL has been assigned a target for gas transmission of around 81.5 million standard cubic meters a day of natural gas from domestic sources and through LNG route. It includes the gas marketing target of around 70 million standard cubic meters a day. The MoU also provides for an excellent production target of 390 TMT of polymers and 1,260 TMT of liquid hydrocarbons.
GAIL’s performance will be assessed on key financial parameters and also dynamic and sector, enterprise specific parameters such as gas sourcing, E&P and coal bed methane, city gas projects, pipeline projects implementation, business development & globalization, safety, customer focus, quality management etc.
PFC & IREDA ink MoU fro funding power projects
Power Finance Corporation Ltd and Indian Renewable Energy Development Agency Ltd signed a MoU on March 25th 2008 for facilitating joint financing of renewable energy, energy efficiency & conservation and medium & large hydro projects.
The MoU was signed by Mr Shyam Wadhera director projects of PFC and Mr Debashish Majumdar CMD of IREDA in presence of senior PFC and IREDA officials.
PFC and IREDA shall cooperate to leverage their respective strengths and competencies built over the years for facilitating financing of renewable energy, energy efficiency & conservation and medium & large hydro projects for mutual benefit.
At present the installed capacity of electric power from renewable energy sources in India is 10,209 MW and keeping in view the potential, Ministry of New and Renewable Energy has set for itself a goal to add an additional 14,000 MW capacity of grid quality power through non-conventional renewable resources from commercially exploitable resources by the end of 11th Five Year Plan.
TATA Motors and Fiat JV to invest INR 2,341 crore in Pune
It is reported that Fiat India Automobiles Limited, a 50:50 JV between Fiat Group Automobiles SpA and TATA Motors, has rolled out plans for expanding production capacity and backward integration at its Ranjangaon facility in Pune district. It has also signed a MoU with the Maharashtra government for an additional investment of INR 2,341 crore under the expansion plan.
Mr Vilasrao Deshmukh chief minister of Maharashtra, while addressing the MoU signing ceremony, said that this takes the total investment by Fiat India at the Ranjangaon plant to INR 4,020 crore. With this, the total committed investment that the state has fetched in the past 2 years comes to INR 119,000 crore in 95 mega projects.
Mr Rajeev Kapoor CEO of Fiat India said that the MoU will be a boost to its plan to launch two B and C segment cars namely Grande Punto and Linea, which would roll out from the Ranjangaon plant later in 2008. He added that "By 2012, the capacity of the plant would be expanded to 200,000 cars, 300,000 diesel engines and 300,000 spare parts and accessories per annum. At present, the plant has a capacity to produce 100,000 cars and 200,000 engines.
In addition to premium cars, the plant would also manufacture Fiat’s successful 1.3 liter multi jet diesel engines and 1.2 & 1.4 liter fire gasoline engine and the C549 transmission ones.
Indian Railways to set up high speed rail corridors in South
Mr KC Jena chairman of railway board recently said that Indian Railways is exploring the possibility of setting up a high speed rail corridor connecting Chennai, Bangalore, Coimbatore and Kochi. He added that six high speed passenger corridors have been planned as a public private partnership.
Mr Jena said that Kerala has been allotted INR 349 crore for the next financial year against INR 283 crore sanctioned in the previous year with an objective to develop infrastructure. He added that the rail connectivity to the proposed Vallarpadam international container transshipment terminal project would be completed by 2009.
On the proposed Angamaly Sabarimala rail link, Mr Jena said that Indian Railway is keen to carryout the work, which has at present been held up due to land acquisition issues. He added that Indian Railway Catering & Tourism Corporation and the Kerala Tourism Development Corporation have joined hands to start a few package tours connecting different tourism destinations in the state.
Sri Lanka to speed up construction of Norochcholai plant
Sri Lankan ministry of power & energy said that it has issued instruction to the Chinese company undertaking the construction of the coal power plant at Norochcholai to accelerate the project.
According to the sources, Mr John Senavirathne power & energy minister has instructed the construction company to finish the project by the year 2010, one year ahead of the scheduled time period.
Meanwhile, the sources said that the project has achieved a significant progress. The civil engineering activities of the project have been completed and the ground preparation for the construction of the main plant is at its final stage.
According to the company, a special team of 100 engineers is available in this week to work on the extensions of the main plant. The project, worth USD 455 million expects to add 300 MW to the national electricity grid once it is completed.
Emami’s Haldia bio diesel plant to be completed by March
It is reported that Kolkata based Emami Group is planning to commence its operations at its Haldia bio diesel plant in Midnapore district of West Bengal by end of March 2008.
The 40 acre plant is set with an investment of INR 150 crore and will have a capacity of producing 100,000 tonnes per annum of bio diesel. The equipment at the proposed plant has been imported from Italy.
For feeding the bio diesel plant with adequate supply of feedstock, Emami is looking at entering into Jatropha cultivation over an area of 100,000 acre in West Bengal, Orissa and Andhra Pradesh.
PPA soon for Rasoya Proteins coal power project
BS reported that Yavatmal based Rasoya Proteins is expected to sign a power purchase agreement for its 20 MW coal based power project at Wanjari in Yavatmal district of Maharashtra by April 2008.
The project entailing an investment of around INR 100 crore is being implemented in 2 phases of 10 MW each. Rasoya Proteins has achieved financial closure for both phases of the project, coming up on an area of 15 acres of land. The EPC contract has been awarded to Chennai based Cethar Vessels Private Limited.
Civil works for phase 1 is underway with completion expected by June 2008, whereas Phase II is still in the planning stage.
BPCL GAIL JV to market CNG in Kerala & Karnataka
BS reported that Bharat Petroleum Corporation Limited and GAIL India Limited will float a JV to be called Go Gas, for marketing compressed natural gas and piped gas in Kerala and Karnataka.
GAIL and BPCL have signed a MoU for the INR 400 crore ventures. The equity structure of the JV will be similar to Indraprastha Gas. GAIL will own 22.5% stake in the company, BPCL 22.5%, Kerala government 5% and the rest will be held by strategic investors, public and financial institutions.
Mr Rajiv Mathur GM business development at GAIL said that "We are waiting for the gas to come from Petronet’s Kochi LNG terminal."
Petronet’s upcoming liquefied natural gas terminal in Kochi is facing delays. The terminal is now scheduled to be commissioned in 2011. It was expected to be ready by June 2010 after missing the 2009 deadline. Its Kochi terminal will handle 5 million tonnes per annum LNG.
It may be noted that the Petroleum & Natural Gas Regulatory Board in November 2007 had proposed a competitive bidding process to select public and private entities for developing city gas distribution networks in India.
Vale Xstrata tie up – Called off
Both Vale and Xstrata announced that discussions regarding a potential combination of the two companies have been terminated by mutual agreement.
Vale said that “It had put forward an indicative proposal to Xstrata Plc that included cash and shares offer for 100% of Xstrata which it believes would have created significant value for both sets of shareholders. Given that an agreement was not reached, discussions between the parties have been discontinued.”
Vale added that “For the purposes of Rule 2.8 of the City Code on Takeovers and Merger, Vale reserves the right to announce an offer or possible offer or make or participate in an offer or possible offer for Xstrata and or take any other action which would otherwise be restricted under Rule 2.8 of the City Code within the next six months in the event that
1. An agreement or recommendation from the Board of Xstrata is forthcoming
2. There is an announcement by a third party of a possible offer or a firm intention to make an offer for Xstrata or Xstrata announces that it has received an approach in relation to a possible offer from a third party
3. Xstrata announces a whitewash proposal for the purposes of Rule 9 of the City Code or a reverse takeover
4. There is a material change in circumstances
Mr Mick Davis CEO of Xstrata said that “While Vale and Xstrata continue to believe that a combination of the two companies could realize significant value for both sets of shareholders, we have not been able to reach agreement. We have therefore mutually decided to cease discussions.”
Rio lifts force majeure at Australian coal mine
Reuters reported that Rio Tinto Ltd has lifted force majeure on coal shipments from its Hail Creek coking coal mine in Australia. Rio had declared force majeure in February after heavy rains brought production from the mine to a standstill.
Mr Hubie van Dalsen MD of Rio Tinto's Australian coal operations would not comment on the total coal production Rio lost due to the floods, but said it had used all of its port and rail allocations. He added that it had also used some of the allocations its competitors had been unable to use to sell some spot coal.
Mr Van Dalsen said that "We have a number of significant organic development opportunities and we remain open minded for any acquisition opportunities that may come our way.”
Rio in December earmarked USD 991 million to extend its Kestrel coking coal mine to lift output to an average of 5.7 million tonnes a year until 2031. Separately, a USD 950 million investment at its Clermont coal mine was expected reach full capacity in 2013 and produce up to 12.2 million tonnes of high-grade thermal coal annually.
Opposition grows to planned POSCO mill in Vietnam
Chosun.com reported that POSCO is now facing difficulties with its proposed mill in Vietnam in addition to the deadlock in India.
Since last year, POSCO had been smoothly conducting a feasibility study of the construction of a steel mill near southern coastal Khanh Hoa Province's Van Phong Bay. But from early this year, POSCO has been facing stiff opposition from the local press and some Vietnamese government agencies over the proposed site of the mill.
According to POSCO and Vietnamese press on POSCO recently reached an agreement with the Vietnamese government to build the mill on a 9.6 million square meter lot in the vicinity of the bay. This area, which has a deep sea and beautiful scenery nearby, is part of a larger area where the Vietnamese government plans to build an international container ship terminal.
Strong opposition to the planned steel mill has been growing among the Vietnamese press, academics, and some government agencies. They are concerned that the mill would make it hard to expand the shipping terminal to meet the demands of the country's growing economy. They are also worried about possible environmental damages.
Since early this year, local oceanographers and environmental groups have sent letters to the government and the ruling Communist Party opposing the steel mill and demanding that the project be reconsidered. Some media outlets, including Tuoi Tre, a newspaper published in Ho Chi Minh City, have also expressed frank opposition.
A senior POSCO executive said that "We first began studying the feasibility of a steel mill in Vietnam at the request of the Vietnamese. We'll minimize any possible damage to the environment by using the environmentally-friendly FINEX process rather than the blast furnace process for the mill."
Iron ore price negotiations –BHPB chairman on charm offensive in China
The Australian Financial Review reported that Mr Don Argus chairman of BHP Billiton recently had discussions with Mr Wen Jiabao premier of China and other officials from key ministries, in a bid to reach an agreement over the scrapping of benchmark pricing settlements for iron ore.
Mr Argus told Chinese business magazine Caijing that the benchmark system was detrimental to producers and consumers and also refuted allegations by China Iron and Steel Association that some Australian suppliers had diverted contract ore to boost spot market sales.
Mr Argus told Caijing that "We did not and we will not betray our contract obligations.”
According to the paper, Mr Argus also used the talks to allay Chinese fears over BHP Billiton's hostile takeover bid for rival Rio Tinto as China has raised concerns that the takeover would reduce the number of suppliers to the market and further drive up iron ore prices.
ArcelorMittal acquire additional shares of Noble International
ArcelorMittal announced that it has provided Noble International Ltd with a USD 50 million convertible subordinated loan. The proceeds of this financing will be used by Noble to reduce Noble's North American senior debt and to support its operations.
ArcelorMittal also announced that it has agreed to acquire an additional 10.31% of shares of Noble from Mr Robert J Skandalaris chairman and founder of Noble. That it will increase ArcelorMittal's shareholding in Noble to approximately 49.95%.
The agreement is subject to satisfaction of certain conditions.
The release added that “ArcelorMittal looks forward to working closely with Noble in order to build on Noble's success.”
Noble is the world's largest producer of laser-welded steel products.
LKAB palletizing plants in Malmberget in operation again
LKAB announced that the work with restoration and restarting after the fire has been going on with full force all the Easter holiday and more sections of the concentrating plant could start production late on Saturday March 22nd 2008.
LKAB said that “This enabled start up of the second palletizing plant in Malmberget, the MK3, which started production again on March 24th 2008 with that, the production in Malmberget reached 75% of the normal capacity.”
LKAB added that “Next step in the restoring process is to start up another section in the concentrating plant, and thereafter the MAC and Hematite lines.”
Rautaruukki supplies structures for Heathrow terminal No 5
Rautaruukki has delivered the load bearing structures for London Heathrow’s new Terminal 5, which will open this week on March 27th 2008. The delivery was worth a total of around EUR 15 million.
As per release, Ruukki supplied almost 4 kilometers of roof girders and over 10 kilometers of purlins for the new terminal. The steel structures for Terminal 5 were made at Ruukki’s Kalajoki and Ylivieska plants in Finland.
To put the size, 12,500 tonnes, of Ruukki’s delivery into perspective, the structures for the Eiffel Tower in Paris weigh around 7,300 tonnes.
With around 67 million passengers a year, Heathrow is Europe’s one of the busiest airport. The new terminal will considerably improve Heathrow’s poor standard of service, which is the result of overcrowding. Terminal 5 is almost 400 meters long, 176 meters wide and 40 meters high and will house 25 restaurants and 150 shops.
In addition to load bearing structures, Ruukki has delivered prefabricated roof elements for other terminals at London Heathrow: to the construction site for Terminal 1 this year and for Terminal 3 last year.
Acerinox announces CAPEX for Palmones Factory
Acerinox SA has announced a plan of investment into its Palmones factory Campo de Gibraltar of EUR 45.6 million over the next two years which it says will include ‘improvements relating to the environment.
Acerinox SA in a statement said that it approved a Plan of Investments (Phase XVII) that an important part of the phase would see 22 % of the money dedicated to improvements relating to labor security and the environment. The remainder will be devoted to the improvement and modernization of production equipment currently in operation.
This investment program is added to the approved one year ago (Phase XVI), amounting to EUR 49.9 million, also aimed at the factory of the Campo de Gibraltar, which is currently in an advanced stage of implementation.
Acerinox added that “With these investments shows the determination of ACERINOX SA to keep their production facilities and services at the highest degree of efficiency and commitment to the safety of their workers and the environment.”
Taiwanese domestic rebar prices hit record high level
It is reported that Taiwan domestic rebar prices rose to a new high with Feng Hsin Iron and Steel Co one of the country's main rebar makers, adjusting its wholesale rebar price upward by TWD 800 (USD 26.50) per tonne to TWD 28,300 per tonne.
The report added that Feng Hsin Iron and Steel Co also increased its wholesale price for H shaped steel girders by TWD 400 per tonne to TWD 28,600 per tonne and increased its offer for steel scrap by TWD 400 per tonne to TWD 15,700 per tonne.
Rebar wholesalers said that Feng Hsin's new rebar price is still below prices on the domestic market, which have already risen to between TWD 2,8500 and TWD 29,000 per tonne.
Feng Hsin said it made the adjustments to reflect its increased costs, pointing out that the Japanese scrap steel price has risen to USD 530 per tonne, while the domestic steel billet price has jumped to TWD 26,000 per tonne.
Rasselstein growth bucks tin plate market trend
Dr Ulrich Roeske CEO of Rasselstein GmbH, Germany’s only tinplate producer, said that “Despite significant price increases, tinplate from Germany will remain in demand worldwide.”
Speaking to journalists in Düsseldorf, Dr Roeske outlined that how the Andernach based company, a subsidiary of ThyssenKrupp Steel AG, Duisburg, is gearing up to deal with stiffening global competition. Over EUR 160 million of capital investment in state of the art facilities in recent years have turned Rasselstein into the world’s biggest tinplate producer with a capacity of 1.5 million tonnes. The company employs around 2,400 people and is the biggest single customer of ThyssenKrupp Steel AG, taking around 10% of its hot band production.
Dr Roeske said that “Our existing customers have been a key factor, accounting for 95% of this growth. The company was pursuing an uncompromising premium strategy in which technology and quality are key priorities.” He added that the almost 250 year old company is a vital part of the local economy at its site at Rhineland in Palatinate. The latest investment by the ThyssenKrupp Group is seen as a commitment to the tinplate business and to Germany as a manufacturing location.
Dr Roeske said that the international tinplate market is a niche market, accounting for roughly 1% of total world steel consumption. Steel is resisting competition from other packaging materials thanks above all to its ecological advantages, a key factor alongside safety, cost and production related benefits. Whereas Rasselstein can rely on its innovativeness as an important competitive advantage over other materials and other tinplate manufacturers, cost is becoming a serious concern.
Dr Roeske said that “Never before have we experienced such a simultaneous explosion in the costs of almost all our input materials. With ore prices set to go up by 65% in 2008 and prices for alloying elements, coal, energy, scrap and transportation also rising, we face drastic increases in our starting material costs.” He added that one particular cost factor is the price of tin, currently at an all time high of over USD 20,000 per ton.
Dr Roeske said that “The increases in our own tinplate manufacturing costs come on top of the raw material costs pointing to already announced further price increases for hot band. These costs will have to be charged on to the market. Our customers have good arguments for passing on the price increases we are having to impose on them. Quality has its price.” Despite the concerns, Dr Roeske remains optimistic that “With the quality of its products and its unique range of services and technical support, Rasselstein is confident of continuing high demand.”
Rasselstein’s main sales region for tinplate, the raw material for food, beverage, aerosol and other cans, is the enlarged area of Europe. Bucking the trend on this generally stagnating market, it has increased both its market share and its absolute level of shipments.
Perilya bids AUD 294 million for CBH Resources
It is reported that Australia's Perilya Limited bids AUD 294 million for fellow zinc miner CBH Resources Limited, aiming to unite their ageing mines as they try to diversify to counter a sagging zinc price.
The miners said in a joint statement that the friendly deal, which was flagged a month ago when the pair revealed they were in talks, would lead to major efficiencies at their operations in the Broken Hill region of eastern Australia. The two miners said that the new company would have an equity market value of about AUD 491 million, making it one of Australia's top 40 listed miners. Under the terms of the deal, Perilya would offer 1 of its shares for every 3 CBH shares and one Perilya option for every 20 CBH options.
Mr Patrick O'Connor chairman of Perilya said that "The combination of the two companies is a logical development that will create a new force in global lead and zinc markets."
The tie up comes as Perilya and CBH take steps to diversify away from ageing zinc mines by adding other commodities to their activities, and amid forecasts for declining zinc prices with a large surplus expected in the market this year.
Perilya is looking to develop a new copper mine in eastern Australia while CBH Australia wants to dig a copper and zinc mine in Western Australia. They said that the deal had the support of Japan's Toho Zinc Co Limited, which has a 25% stake in CBH.
Reliance Steel to sell Encore Coils business
Reliance Steel & Aluminum Company recently announced that it has sold the assets and business of its Encore Coils division to Samuel Son & Co Limited.
Reliance closed on its purchase of the Encore Group of metals service center companies, of which Encore Coils is a part, on February 1st 2007. Encore Group includes Encore Metals, Encore Metals USA Inc, Encore Coils & Team Tube and Reliance will retain the Encore Metals and Team Tube divisions of the company.
Encore Coils processes and distributes carbon steel flat rolled products through 5 facilities in Western Canada.
Los Angeles based Reliance is a metals service center company with more than 180 locations in 37 states and Belgium, Canada, China, South Korea and the United Kingdom.
Sidor to face another strike on March 27th 2008
BNamericas reported that employees of Venezuelan steelmaker Ternium Sidor are set to call another strike again on March 27th 2008 after a demonstration scheduled for the same day.
Mr Johny Luna treasurer of steelworkers union Sutiss said "The most likely thing is that after the march where the community, the families and the unions will come together, we will paralyze operations again. He said employees are standing firm on their demand to receive a salary increase of VEB 68 per day.”
Ternium Sidor recently proposed a final offer to boost salaries by VEB 44 per day raising the basic monthly wage from VEB 1,240 to VEB 2,572 up by 107%. According to the union employees hope to return to the negotiating table but would like the nation's vice president to participate in the process.
No talks have been held since an 80 hour strike staged several days ago.
US February steel import volume declines by 8% MoM
Based on preliminary Census Bureau data, the American Iron and Steel Institute reported that the US imported a total of 2,458,000 net tons of steel in February 2008, including 1,905,000 net tons of finished steel down by 8% MoM and 14%YoY respectively.
Total and finished steel imports on an annualized basis are down by 8% and 7% respectively as compared to 2007. On an annualized basis, total imports of steel in 2008 would be 30.7 million net tons.
For the first two months of 2008, products showing increases vs. the same period in 2007 were
1. Line Pipe up by 59%
2. Heavy Structural Shapes up by 19%
3. Hot Rolled Sheet up by 9%
4. Oil Country Goods up by 6%
For February, the largest volume of finished steel imports from offshore were
1. China at 235,000 net tons down by 14% MoM
2. South Korea 151,000 net tons down by 35% MoM
3. Japan 88,000 net tons down by 29% MoM
4. Germany 88,000 net tons up by2% MoM
5. India 83,000 net tons down by 19%MoM
Indonesian coal exports in January dip by 5.5% YoY
According to shipping sources quoting McCloskey, Indonesian coal exports reached 13.7 million tonnes in January 2008 down by 5.5% YoY as compared with 14.5 million tonnes in January 2007.
As per report, the majority of the annual decline came from lower shipments to China, which fell by 0.4 million tonnes YoY 1.1 million tonnes. Exports to Taiwan and India were also lower. Meanwhile, shipments to the biggest export destination like Japan increased by 0.2 million tonnes YoY to 2.5 million tonnes.
Greenpeace blocks coal shipment in New Zealand
Greenpeace reported that for several hours, the Rainbow Warrior blocked a shipment of export coal from leaving the Port of Lyttelton in New Zealand.
Officials of the coal ship called Hellenic Sea said that "Just as it was due to depart, the captain of the Rainbow Warrior moved our ship into position and set 2 anchors effectively blocking the larger ship in. Police arrived quickly and boarded the Rainbow Warrior, but 3 activists managed to slip over the side into a waiting boat and speed over to the Helenic Sea. Once there they climbed onto the hull, attached them to the ship and deployed a banner reading 'Target Climate Change'.
When fully loaded the Hellenic Sea would carry up to 60,000 tonnes of export coal mined on the West Coast by state owned enterprise Solid Energy.
Voestalpine holds 90.24% in Boehler
It is reported that Austrian steel processing company voestalpine AG has now holds 90.24% of the voting rights in Boehler Uddeholm AG and will initiate steps to perform a squeeze out for the remaining shares.
Subject to approval by the supervisory board, voestalpine said it will start the procedure in accordance with the Austrian Minority Shareholders Squeeze Out Act and plans to adopt a resolution to this effect at Boehler's annual meeting on June 23rd 2008.
It said that "No predictions can be made at this time as to the amount of cash settlement payments to be made to minority shareholders; the amount will be set and made public according to the Minority Shareholders Squeeze Out Act.”
Voestalpine launched a surprise bid for Boehler a year ago, foiling the takeover plans of private equity firm CVC Capital Partners Ltd, which had run into fierce political opposition. A merger of voestalpine and Boehler which makes high quality steel used for tools, razor blades and jet engines would create one of Austria's biggest companies, with annual turnover of around EUR 10 billion.
Atlas targets up to 180 million tonnes of iron ore in Pilbara
Atlas Iron Limited recently said that recent geological mapping and surface sampling has highlighted exploration targets with combined potential for 120 million tonnes to 180 million tonnes of iron ore grading 57% to 60% Fe at its Western Australia tenements. Atlas said that a revision to an exploration target of 120 million tonnes to 180 million tonnes grading 57% to 60% Fe represents a four fold increase and a major growth opportunity for the company.
Atlas said that during recent mapping and sampling the company’s geologists identified several new areas of outcropping iron enrichment. It added that “These areas are typically delivering ore grade mineralization in surface samples and range in size up to approximately 2,000 meters by 100 meters and 500 meters by 660 meters.”
Atlas said the prospects discovered have subsequently been ranked for drilling later this year. It advised that it remained on target to commence exporting of iron ore in October 2008, from deposits discovered and drilled out at Pardoo.
Mr David Flanagan MD of Atlas Iron said that the discoveries appeared to be major and if assumptions were correct they had the capacity to make Atlas Australia’s fourth largest iron ore exporter. He added that “Atlas has a history of getting our exploration targets right.”
Atlas added that “Given the past success of exploration exceeding previous targets, the company remains optimistic that ongoing drilling during 2008 will deliver significant resource upside and a rapidly growing production profile over the years ahead.”
CMC posts lower Q2 profit
Commercial Metals Co announced that it has posted a 40% YoY drop in Q2 profit due to unexpected inventory charges. CMC reported a net earnings of USD 39.8 million on net sales of USD 2.3 billion for the Q2 ended February 2008 as compared to with net earnings of USD 65.9 million on net sales of USD 1.9 billion for the Q2 0f 2006. Its Q2 included after tax LIFO expense of USD 38.3 million as compared with expense of USD 12.3 million in Q2 of 2007. Selling, general and administrative expenses in the second quarter included USD 14.7 million of pre tax costs associated with the investment in the global deployment of SAP software.
CMC also said that “During the Q2, we repurchased 3.7 million of our shares at an average price per share of USD 27.36. This represented 3.1% of the shares outstanding at the beginning of the quarter. For the six months we have purchased 5,412,238 shares at an average price of USD 28.00 per share.”
CMC’s net earnings for the six months ended February 29th 2008 were USD 108.9 million on net sales of USD 4.4 billion as compared to USD 151 million on net sales of USD 3.8 billion same period of last year. For the six months ended February 29th 2008, after tax LIFO expense was USD 35.5 million compared with an expense of USD 18.9 million last year. For the six months ended February 29th 2008, Selling, general and administrative expenses was USD 25.0 million and other costs of USD 9.2 million were capitalized during the quarter.
Mr Murray R McClean president & CEO of CMC said that "Market conditions improved steadily throughout the quarter. December ended excess inventory hangovers and the quarter saw an unanticipated USD 97 per short ton spike in ferrous scrap pricing followed by an USD 85 per ton increase in rebar and merchants by quarter end. Management's outlook had not anticipated a LIFO effect for the quarter; however, the dramatic increase in pricing inevitably led to a huge LIFO expense of USD 0.32 a share, a record quarterly charge. Our Americas Recycling segment, propelled by ferrous scrap pricing, had a strong second quarter. Our Americas Mills segment, on the strength of higher production and shipment levels, overcame a temporary metal margin squeeze. The Americas Fabrication and Distribution operations felt the margin squeeze and the effect of a massive LIFO charge although underlying operations remain solid. The International Mills were at extremes. CMCZ (Poland) shook off lethargic pricing early in the quarter to achieve excellent results in the second half of the period. CMCS (Croatia) remained in turnaround mode. International Fabrication and Distribution showed continued strength in raw materials inter Asian trade and European markets."
Steel worker crushed to death at ArcelorMittal Indiana Harbor
Post-Tribune reported that Mr James Wingfield IV was crushed to death in an accident at ArcelorMittal's Indiana Harbor plant.
Mr Tom Hargrove president of United Steelworkers Local 1010 said that Mr Wingfield was helping workers change a tundish cover on basic oxygen furnace No 4 on the east side of the plant shortly after 10 AM.
Mr Hargrove said that officials from the union and ArcelorMittal were investigating the incident Monday and the Indiana Occupational Safety and Health Administration was notified around noon and an inspection team was at the mill Monday afternoon.
Mr David Allen spokesman of ArcelorMittal said that the accident occurred at 10:10 AM during routine maintenance and offered
Officials from the union and ArcelorMittal were investigating the incident. The Indiana Occupational Safety and Health Administration were notified around noon and an inspection team was at the mill.
Vietnam coal output in March likely to fall by 1.3% YoY
According to General Statistics Office of Vietnam, Vietnam's coal production is likely fall by 1.3% YoY to 3.438 million tonnes in March 2008. Revised General Statistics Office data showed, the figure was higher than the 3.045 million tonnes produced in February 2008.
Vietnam is estimated to have also exported 1.6 million tonnes of coal valued at USD 75 million in March down by 49.7% in volume terms and down 21.9% in value.
Between January and March 2008, Vietnam exported 4.727 million tonnes of coal valued at USD 220 million down by 41.1% YoY in terms of volume and down by 10.7% YoY in terms of value.
NSSC launches new SS surcharge based on chrome price
Japanese Nippon Steel & Sumikin Stainless Steel is set to implement a new chrome base surcharge for stainless steel on the ground of recent surging chrome prices.
Currently in Asia, only Japan is the sole country where Japanese mills set up their monthly prices on the basis of base price to reflect the supply and demand market and surcharges according to nickel and chrome prices as monthly averaged.
South Korea POSCO also intends to follow suit, while some Asian mills are now seriously contemplating the feasibility to work on a surcharge based system in pricing.
Vietnamese billet import prices soars to a news high
Vietnamese import price of square billet has reached USD 900 per tonne CFR, about USD 100 per tonne higher from the beginning of March.
One week ago, the Malaysian export price of billet was contracted at around USD 870 per tonne CFR, but now the offering price hit as high as USD 900 to USD 910 per tonne CFR.
Due to short supply from CIS, Russian square billet export price to Vietnam has soared to USD 910 per tonne CFR. The main reasons were surging raw materials and production costs.
Taiwanese government has banned the export of billet which is also a key factor to drive Vietnam’s billet price soar.
(Sourced from YIEH.com)
Gerdau to decide heavy plates mill location in 3 months
BNamericas reported that Brazilian steel company Gerdau will decide in two to three months the location of a heavy plate mill it plans to build.
As per report the unit will require a USD 400 million investment in one of Gerdau's existing mills and new heavy plates capacity is forecast to be 870,000 tonnes.
In December the group announced it is in the final stages of a feasibility study for the project.
US weekly crude steel production up by 2.1% YoY
American Iron & Steel Industries reported that in the week ending March 22nd 2008, US’s raw steel production was 2.118 million net tons while the capability utilization rate was 88.8%. Production was 2.073 million net tons in the week ending March 22nd 2007, while the capability utilization then was 86.3%. The current week production represents 2.1% increase from the same period in 2007.
Production for the week ending March 22nd 2008 is up 1.5% from the previous week ending March 15th 2008 when production was 2.086 million net tons and the rate of capability utilization was 87.5%.
Adjusted YTD production through March 22nd 2008 was 24.707 million net tons at a capability utilization rate of 88.4%. That is a 5% increase from the 23.515 million net tons during the same period last year, when the capability utilization rate was 83%.
District wise production for the week ending March 15th 2008
1. Northeast Coast: 184
2. Pittsburgh/Youngstown: 218
3. Lake Erie: 83
4. Detroit: 115
5. Indiana/Chicago: 506
6. Midwest: 271
7. Southern: 652
8. Western: 89
(In thousands of net tons)
AISI’s estimate is based on reports from companies representing about 75% of the US’s raw steel capability and includes revisions for previous months.
Champion Minerals expands its iron property holdings in Labrador and Quebec
Champion Minerals Inc announced that it has expanded its property holdings adjacent to its wholly owned Attikamagen Lake Iron Property which is located in Labrador near Schefferville in Quebec.
With the staking of the Lake Attikamagen Extension Claim Block, which consists of 451 claims contiguous to and partially surrounding the 52 claim Attikamagen, Champion's Labrador property holdings have increased to 503 claims comprising 126 square kilometer. On the Quebec side of the Labrador/Quebec border, adjacent to the northern portion of the Attikamagen Extension Claim Block, the Company staked an additional 29 claims, the Lac Sans Chef Quebec Claim Block, comprising 13.7 square kilometer. Collectively, the Attikamagen, Attikamagen Extension Claim Block and Lac Sans Chef Quebec Claim Block cover 139.7 km2 and will be referred to as the Attikamagen Property.
Champion's recently completed airborne geophysics and surface sampling campaign at Attikamagen, in combination with a detailed review of the assessment work in the area led to the decision to stake the properties containing favorable iron formations. Little historical work has been performed on the newly acquired properties, but previous mapping by Hollinger North Shore Exploration Company in 1959 outlined taconitic iron formation and also enriched iron formations in outcrop, the direct shipping ore type that was previously mined in the Schefferville camp during its production era.
Champion is planning to perform detailed surface work and drilling along these favourable horizons, combined with mini bulk sampling in order to quantify the higher quality iron mineralization at the Attikamagen Property.
Champion is a junior exploration Company focused on discovering and developing significant metal resources in eastern Canada, particularly in Newfoundland-Labrador and Quebec. The Company's projects include the Powderhorn Base Metal Project located in central Newfoundland, and the Attikamagen Property, located in western Labrador/northeastern Quebec.
Kobe Steel develops ultra high tensile steel
JMB reported that Kobe Steel has develops a high tensile steel sheet with more than 980 mega pascal of strength to serve lighter weight and better safety of automobile.
Kobe Steel has tried to improve the world supply network through US joint venture, PRO TEC Coating Company and partnership with Voestalpine Stahl of Austria.
Investment fund calls for improving corporate value to Maruichi Steel
Steel Partners Japan Strategic Fund announced that it submitted to Maruichi Steel Tube Ltd a presentation entitled “Suggestions to Improve Corporate Value”. The Presentation, delivered to the Company on February 21st 2008, includes suggestions for improving financial competitiveness as well as comparative analysis of the Company’s current performance versus other companies in the steel sector.
Steel Partners Japan Strategic Fund stated its support for certain initiatives recently announced by the Company, including a new dividend policy that aims for an annual dividend of 40% of the parent company’s net profit, and a 500,000 share repurchase plan with maximum expenditure of JPY 1.7 billion. It believes that shareholder value could be further improved by the more efficient use of capital, as suggested in the Presentation.
Mr Warren Lichtenstein of Steel Partners Japan Strategic Fund said that “We applaud the Company for maintaining its leading domestic market position, with strong margins and stable profitability. We encourage management to capitalize on the progress it has already made.”
Steel Partners Japan Strategic Fund also believes the implementation of the suggestions contained in the Presentation could result in higher earnings per share and help the company achieve an 8% return on equity, the minimum return required by the Pension Fund Association to support the re election of directors to the Company’s Board of Directors.
Steel Partners Japan Strategic Fund is a long term relationship/active value investor that seeks to work with the management of its portfolio companies to increase corporate value for all stakeholders and shareholders.
Base metal prices fall on LME last week
After the US Federal Reserve Board announced to decrease the discount rate to 3.25% all base metal prices on the LME were dropped last week.
Many investors think this is a sign that US economic will decline in the near future. The three month price of nickel decreased by 2.9% to USD 28,550 per tonne last week.
On the other hand, the three month price of copper dropped by 2.6% to USD 7,840 per tonne. Aluminum was down by 3.6% to USD 2,843 per tonne. Besides, the three month price of zinc dropped by 3.6% to USD 22,270 per tonne.
(Sourced from YIEH.com)
Timken senior VP of innovation and growth to step down
Timken Company announced a restructuring for the modernization and growth function of the company. Timken said the executive level change, which would help reorganize strategic planning and innovation processes, would take effect on March 31st 2008.
Consequently, Ms Jacqueline Dedo who was holding the post of senior vice president of innovation and growth until recently is stepping down from her post.
Mr Alastair Deane senior vice president of technology, who was reporting to Ms Dedo earlier will henceforth report to Mr James Griffith, president & CEO of Timken, with effect from March 31
Mr Deane manages the company's international network of technical centers and is in charge of leading the company's technology as well as innovation efforts worldwide.
Mr Griffith said that "Creating customer value through innovation has always been the lifeblood of our company, with this reorganization, we expect to further strengthen our processes for value creation."
Worthington bags John Deere Enterprise Supplier award
Worthington Steel, a Worthington Industries company, announced that it has been recognized by Deere & Company as a Partner level supplier for 2007 and was also named a 2007 Enterprise Supplier of the Year in the John Deere Achieving Excellence Program. The Partner level status is Deere & Company's highest supplier rating.
Worthington Steel is a supplier of hot roll and cold roll cut to length steel sheets to the John Deere Harvester Works at East Moline in Illinois and the John Deere Ottumwa Works at Ottumwa in Iowa, for combine, baler and mower conditioner parts.
Mr Mark Russell president of Worthington Steel said that “We are extremely proud to be recognized as one of seven John Deere suppliers to receive the Supplier of the Year award. The awards are a testament to our employees' commitment to quality and service, as well as their dedication to continuous improvement.”
Adriana acquires Bedford Iron Prospect in Labrador
Adriana Resources Inc announced that it has signed a MoU to acquire a 100% interest in the Bedford Iron Prospect consisting of 94 mineral claims covering 2,350 hectares, located within the Labrador Trough of northeastern Labrador. Subsequently, Adriana staked an additional 82 mineral claims totaling 2,050 hectares, directly adjacent to the Bedford Iron Prospect claims, which brings the total combined land package to 4,400 hectares. The property is located 27 kilometers northeast of the town of Schefferville, Quebec on the east side of Howells River.
The Property, formerly held by the Iron Ore Company of Canada as part of its designated Blocks 19 and 103 holdings, covers a significant government aeromagnetic anomaly strategically located within 3 kilometers of the LabMag iron deposit and within 12 kilometers of the KeMag iron deposit, both held by New Millennium Capital Corp. The Property is also within close proximity to several Direct Shipping Iron Ore deposits previously owned by the Iron Ore Company of Canada which operated mines in the area from 1954 to 1982. New Millennium Capital Corp. recently announced plans to develop a Direct Shipping Ore operation in order to take advantage of current shortages of iron ore in the world market place.
Adriana can acquire a 100% interest in the Property from Bedford Resources Partners Inc by making escalating payments totaling USD 200,000 over the six year option period, including USD 15,000 in the first year and by conducting exploration designed to advance the project to pre feasibility stage, within the option period. Pursuant to the MOU, Adriana is to pay Bedford a 1.5% royalty from the sale of iron mined from the property, subject to the Company's option to buy down 50% of the royalty at fair market value at anytime following completion of a bankable feasibility study.
Adriana also has an option to earn 100% interest in the Lac Otelnuk Iron Project located 165 kilometers northeast of Schefferville, within the Labrador Trough, where the Company has an advanced diamond drilling program designed to delineate a multi-billion tonne NI 43-101 compliant inferred resource. Technical staff and helicopter support assigned to the Lac Otelnuk project will be available to support early stage exploration on the Bedford Iron Prospect during the coming summer field season.
The Lac Otelnuk Project is located 165 kilometers northwest of Schefferville at Quebec, in the Labrador Trough and consists of 600 mineral claims covering approximately 28,920 hectares. The Lac Otelnuk deposit is a Lake Superior type iron formation which has been identified over a strike length of approximately 25 kilometers based on geological and geophysical mapping and exploration drilling in the 1970s. The deposit is nearly flat lying and dips gently to the northeast.
CEZ unit to arrange financing for 3,000 MW plant in Vietnam - Report
Czech daily Hospodarske Noviny reported that Czech power group CEZ subsidiary Skoda Praha plans to arrange financing worth USD 3 billion for a Vietnamese 3,000 MW black coal power plant.
The news paper said that Skoda Praha is considering financing the project with the help of the Czech Export Bank.
A spokeswoman declined to provide details of the project when contacted by Thomson Financial News but said Skoda Praha is planning to send a statement on the deal later today or tomorrow.
BHP resumes work at Neptune facility in the Gulf of Mexico
BHP announced that BHP Billiton has since performed a rigorous analysis that confirmed that its Neptune tension leg platform in the Gulf of Mexico is safe for crews to return to work and crews began boarding the platform. It added that further inspection and assessment is underway to determine the appropriate course of action to mitigate the anomaly.
The Neptune TLP, which is located approximately 120 miles off the Louisiana coastline, was scheduled to start up first oil and natural gas production by the end of March and the Company is currently assessing all the options in order to re-commence start up activities. The schedule for first production will be updated.
During a routine inspection immediately prior to start up of the Neptune tension leg platform, BHP Billiton had found structural anomalies in the hull and as a safety precaution and made the decision to remove all personnel from the facility until the situation could be fully assessed.
Neptune is a single column TLP and was installed in 4,250 feet of water on Green Canyon Block 613. The Neptune field comprises five blocks: Atwater Valley 573, 574, 575, 617 and 618 where water depths range from 4,200 to 6,500 feet.
BHP Billiton is designated operator of the field with a 35% interest. Partners include Marathon Oil Company 30%, Woodside Energy 20%, a subsidiary of Woodside Petroleum Ltd and Maxus Exploration Company hold 15%.
USMA sells 2 more Ghost Fleet ships for breaking
The US Maritime Administration said that two more ships from the James River Reserve Fleet also known as the ghost fleet have been sold for the high value of their scrap steel.
US Maritime said that break bulk freighters Cape Catawba and Cape Canaveral were sold to International Shipbreaking Ltd at Brownsville in Texas for USD 173,297. The price also includes a third ship from the Beaumont Reserve Fleet in Texas.
With global steel prices skyrocketing, the sale marked a small but growing trend of the government selling mothballed ships rather than paying to have them scrapped. The US Maritime Administration also said that it sold another ship from the Beaumont fleet, the Adonis for USD 1.2 million, by far the highest price for a reserve fleet ship.
US Steel Canada appoints Mr Ferns as general counsel
US Steel Canada Inc a subsidiary of United States Steel Corporation announced that Mr Thomas Ferns has been appointed general counsel and corporate secretary effective March 13th 2008.
Mr Ferns corporate experience prior to joining US Steel Canada includes senior management positions both in law and in communications and public affairs. C
Called to the Ontario Bar in 1997, he has also practiced corporate law with a major Canadian law firm. He graduated from Queen's University in 1990 with a bachelor's degree in history. He earned a master's degree in Canadian history and later a law degree from the University of Toronto.
Mr Douglas R Matthews president & GM of US Steel Canada said that "Mr Tom brings extensive expertise to this position. His knowledge of the law and the challenges facing the steel industry in Canada will be a tremendous asset for US Steel Canada.”
Perma-Pipe to perform Crain ONGC pipeline pre insulation
US based MFRI announced that its subsidiary Perma Pipe has received an order to carry out the factory insulating and jacketing services for a 600 kilometer long 24 inch diameter heavy crude oil pipeline in India.
The pre-insulation services will be performed at a new Perma-Pipe facility to be located at Mundra in India on the premises of Jindal Saw Ltd, which will manufacture and fabricate the pipe for the project. The value of Jindal Saw Limited’s contract is in excess of USD 200 million.
The insulation and jacketing work, included in Jindal Saw Limited’s contract, has a total value of approximately USD 60 million, which includes the value of the insulation materials to be procured by Jindal as well as other services to be provided by Perma-Pipe.
The pipeline will be owned by Cairn Energy India Ltd. in partnership with Oil and Natural Gas Corporation and will be used to transport heavy crude oil from their oil fields in Mangala in North West India to a terminal in Salaya, a distance of approximately 600 kilometers. Since the heavy crude oil is essentially solid at ambient temperature, the pipeline must be insulated and electrically heated to assure oil flow.
Mr Avin Gidwani MD of Perma- Pipe Middle East said “This project gives Perma-Pipe the opportunity to serve the oil and gas market in India, one of the fastest growing economies in the world.”
Mr Fati Elgendy president & COO of Perma-Pipe Inc said that “We are very pleased to have received this order which will be the longest underground pre insulated heat traced pipeline ever constructed. Based on the size and complexity of the project, it puts us at the highest level of serving the global market for pre insulated piping.”
MFRI is a leading manufacturer of factory pre-insulated piping systems for oil and gas gathering, district heating and cooling and other specialty applications. Other MFRI products include custom-designed industrial filtration products to remove particulates from dry gas streams and thermal transfer equipment to remove heat from molding, printing and other industrial processes.
PSM not responsible for steel price surge - Pipe Association
The Post reported that extra ordinary increase in price of steel products in Pakistan is due to international prices and local manufacturers of steel which contributes only 20% share of total steel consumption are not responsible for the price hike.
Brigadier (Retired) Muhammad Ajmal Khan secretary of Pakistan Steel Line Pipe industry Association said that “Despite increase in steel prices, Pakistan Steel Mills are playing due role and supplying best quality steel products comparatively at lower rates.”
He said that Pakistan Steel Mill’s management is regularly supplying quality material including coal, iron ore to the manufacturing industries and to the end-users which are appreciate able.
Update on 8th International Arab Iron and Steel Conference
ArabSteel in co operation with Qatar Steel Company and under the patronage of HE Mr Youssef Hussein Kamal minister of finance and acting minister of economy & trade and the Arab Iron and Steel Union organized the 8th International Arab Iron and Steel Conference during March 17th 2008 to March 20th 2008 at Doha.
About 183 companies from 42 Arab and foreign countries and more than 300 participants representing economic and industrial activities, steel industry leaders, businessmen, investors and experts in the field of this industry participated in this conference. During this conference 30 working papers were presented by strategic analysts and experts from Belgium, USA, Egypt, Saudi Arabia, Germany, Qatar, UAE, Algeria, UK, Switzerland, Libya, Italy, India, France, Syria, Australia, Nigeria, China and Ukraine.
The topics which were presented in the conference discussed a number of issues concerning the steel industry and the allied industries such as, the challenges facing the Arab and world steel industry, oil and steel, the best-placed oasis of the Middle East for the new fast growing steel world, the innovative solutions for the challenges of energy and resources, the era of alliances in the steel industry, a call for establishing a joint Arab activity in the steel field.
The presented working papers also discussed the growth strategies in a number of Arab countries Saudi Arabia, Qatar, Algeria and Egypt. They also discussed the steel industry in the Middle East in addition to China and Nigeria as well as the international and regional trends in the steel trade, using the futures contracts, the modern steel technologies and the raw materials in the steel industry, in addition to a number of other steel market related topics.
Turkey urges China to restrict aluminum exports
Interfax China reported that the Turkish government has recently urged China to rein in its aluminum strip and foil exports to Turkey amid growing complaints from Turkish aluminum processors.
The report cited a Chinese government source as saying that "The two sides have agreed to conduct talks to resolve the trade conflict in the coming month and in order to lay a good foundation for the talks, the China Nonferrous Metals Industry Association suspended new approvals for its members to export low value added aluminum strip and foil to Turkey on March 19th 2008.”
He added that "The aluminum strip and foil trade conflict between China and Turkey escalated recently as Chinese exports to Turkey have continued to increase in the past two months, despite repeated complaints from Turkey.”
China retains 13% VAT rebates for both aluminum strip and foil exports and there is widespread market expectation that the Chinese government will cancel the VAT export rebates within this year.
According to figures released by China's General Administration of Customs, China exported 8,334 tonnes of aluminum strip to Turkey in 2007 up by 25.5% YoY and 11,194 tonnes of aluminum foils up by 117.2% YoY.
China Nonferrous Metals Industry Association is a governmental organization that supervises Chinese nonferrous metal companies including hundreds of aluminum fabricators in China.
Steel and cement prices hit new peaks in Pakistan
Dawn reported that Pakistan’s local steel bars price soared to an all time high of PKR 80,000 a tonne, marking an increase of PKR 15,000 a tonne in 12 days, while cement prices continue to show an upward trend.
The Pakistan Steel Mill also increased the rates of its various products. The base price of billet has surged to PKR 51,500 from PKR 45,500 a tonne. The millers have also increased the rate by PKR 7,000 to PKR 61,000, which also includes PKR 1,000 sales tax.
Cement makers, too, have been pushing up the rate of a 50 kilogram cement bag by PKR 5 to PKR 10 every week. A 50 kilogram cement bag, which was being sold for PKR 260 to PKR 265 a week back, will be retailed between PKR 270 and PKR 275 from the next week.
Mr Shamoon Baqar Ali president of Karachi Iron & Steel Merchants Association said that the Pakistan Steel increased the rate. Galvanized iron coil, which was being sold for Shamoon Baqar Ali 65,400 a tonne till recently, price has been fixed at Shamoon Baqar Ali 68,100 a tonne now.
Mr Ali said that the caretaker government did not take any action to check steel prices, which also affected the sale of steel bars. He recalled that last year steel bar price was PKR 48,000 a tonne. Now, many builders who were planning to start a new project suspended their future buying.
According to him, the only way to reduce the prices of steel products is to cut import duty on raw material from 20% to 10% in the budget besides reducing the sales tax from 17.5% to 15%. He added that "The government should also check the Pakistan Steel who has been playing havoc with the prices for the last few months."
Meanwhile, Mr Babar Mirza Chughtai chairman of Association of Builders & Developers said that the builders, who had launched projects 6 months back to complete their construction within 3 to 4 years, were taken aback with the escalating prices of cement and steel bars that already had hit the ceilings and they were now looking for ways to maintain the production cost.
Serco to manage Dubai Metro for 10 years
Khaleej Times reported that UK based international service company Serco will operate and maintain the Dubai Metro system for the first 10 years of its operation.
Mr Mattar Al Tayer chairman & CEO of Dubai Roads and Transport Authority said that "The operator has been finalized after 8 months of hectic work." He added that it will provide operation and maintenance services to all assets of Dubai Metro system during the period of contract.
Mr Al Tayer said that the selection of Serco comes after a public tender floated by the RTA, to which several global companies specializing in rail operation and maintenance had applied. He added that "Following analysis of submitted bids, the offer of Serco Co was nominated as the best bid. It has experience in operating and maintaining a number of metro and rail lines in the UK, Denmark and Australia.''
The agreement was signed between the Roads & Transport Authority and Serco officials following the approval from Mr Shaikh Mohammad Bin Rashid Al Maktoum VP & prime minister of UAE and Ruler of Dubai.
Mr Al Tayer said that Serco will also provide job opportunities to UAE nationals and achieve about 20% to 30% Emiratisation within 5 years of commencing operation. He added that "We will have around 80% of UAE nationals trained to run the Dubai Metro system by the end of the contract. We have awarded the operation contract to a foreign company because there is no any local experience in these fields and it is difficult to establish a technical administrative unit to cater for metro operation without resorting to an experienced body in such line of business."
Roads and Transport Authority is currently carrying out the construction of 74.6 metro systems consisting of the Red and the Green Lines at the cost of AED 15.5 billion. The Red Line will be operational from September 9th 2009 while the Green Line will be ready by March 21st 2010.
Hyundai & IPIC intensify dispute over Korean oil refiner
Khaleej Times reported that South Korea’s Hyundai Heavy Industries has taken a new step in its dispute with the Abu Dhabi based International Petroleum Investment Company over control of a local refiner. Hyundai board has voted to purchase the entire 70% stake that IPIC now holds in Hyundai Oilbank.
The decision came after Hyundai Heavy Industries filed a legal complaint against IPIC, which is trying to dispose of part of its stake to a third party in violation of an agreement.
A Hyundai spokesman said that "Hyundai Heavy Industries has priority to take over IPIC owned stakes under the previous agreement. But IPIC was trying to sell part of its stake to a third party without consultations with us. It is an apparent breach of the agreement."
It may be noted that Hyundai Heavy Industries last week asked a local court to stop any deal between IPIC and GS Group and also plans to apply for international arbitration in Singapore.
According to Hyundai Heavy Industries, IPIC took a 50% stake in Hyundai Oilbank in 1999 and later expanded it to 70%.
Al Jaber to buy 720 Caterpillar machines for AED 809 million
MEED reported Abu Dhabi based Al Jaber Group has placed an AED 809 million order with local dealer Mohammed Abdulrahman Al Bahar for 720 Caterpillar earth moving machines.
The deal is the biggest purchase of Caterpillar machines in Al Jaber's history. It includes a wide range of earth moving equipment that will support the group's operations and expansion plans. Delivery of the machines will start immediately and continue until the first quarter of 2009. Al Jaber has purchased 1,000 Caterpillar machines since January 2007.
According to MEED's 2008 contractor survey, Al Jaber is the largest contracting company in the emirates, with USD 3.5 billion of new orders in 2007 and is well placed to capitalize on the USD 140 billion of real estate projects planned in Abu Dhabi.
Seven firms to submit bids for ADCO pipeline projects
MEED reported that at least 7 international and local contractors are preparing to submit technical bids by March 25th 2008 for a 3 year contract to provide pipeline construction services to Abu Dhabi Company for Onshore Oil Operations.
The USD 100 million contract covers the installation of flow lines and wellhead installations to ADCO. The successful contractor will be employed on a call on, call off basis, carrying out work as and when required.
As per report, the scheme covers the Sahil, Asab and Shah fields and is a precursor to the multi billion dollar SAS full field development, which is currently under bidding.
The invited companies are understood to include the local Al Hussam General Contracting, Lebanon's CAT, Athens based Consolidated Contractors International Company, Oman's Galfar Engineering & Contracting, the local Matrix, India's Punj Lloyd and a local company identified as Bin Frieh.
The consultants on the project are Canada's Veco and the UK's Mott MacDonald.
Agility bags USD 450 million transport contract from Iraq
Kuwaiti logistics provider Agility announced that it has won a contract worth as much as USD 450 million to transport supplies into Iraq.
Agility, without making clear who awarded the contract, said that the contract is for one year and extendable for another two.
Agility added that the deal is shared with four other unidentified companies.
Pakistani cement makers raise prices on higher costs
It is reported that major cement makers in Pakistan have raised prices due to high cost of raw material especially coal that has surged to around USD 140 per tonne from USD 90 per tonne in the last 6 months.
After a PKR 20 to PKR 25 per bag increase on March 6th 2008, the cement companies have again increased ex factory cement prices by PKR 10 to PKR 15 per bag now stands at PKR 240 to PKR 245 per bag. Before this increase, prices averaged at PKR 230 to PKR 235 per bag.
A cement industry official said that the burden of rising cost of production should be passed on to consumer and cement industry should no longer hold cement prices. He added that further rise is expected in the following days as demand is likely to pick up in the coming months.
However, cement dealers in Karachi believe that it is the cement companies desire to raise domestic prices through hoarding while making profits by exporting cement. JS Research expects that cement companies would further increase their ex-factory prices to around PKR 250 to PKR 255 per bag in the coming days.
Updates on Iran Turkmenistan Kazakhstan railway tender
IRNA reported that Turkmenistan will hold a tender for construction of Iran Turkmenistan Kazakhstan railway tracks.
To start construction of the railways connecting the 3 countries, Turkmenistan will hold a tender in Ashkhabad in the presence of Iran, Turkey, Russia, Japan, China, Kazakhstan and European Union.
It may be noted that the initial agreement was signed by the Turkmenistan and Kazakhstan presidents in May 2007. However, the final accord was inked by Iran, Turkmenistan and Kazakhstan on the sidelines of the summit of the Caspian Sea littoral states in September 2007.
The railway length is 900 kilometer of which 700 kilometers go through Turkmenistan, 90 kilometers through Iran and the rest through Kazakhstan. 3 to 5 tonnes of commodities can be transferred via Iran Turkmenistan Kazakhstan railway and the figure can be raised to 15 tonnes.
Egypt to sell oil and gas exploration licenses in south
Reuters reported that Egypt would sell oil & gas exploration and production rights in 12 areas around the south region.
Ganoub El Wadi Petroleum Company said on its website that companies could purchase information about the blocks, located in the Red Sea, Gulf of Suez, and the country’s eastern and western deserts, starting from April 1st 2008.
Mr Mohamed Ezat Sakr VC for exploration & production at Ganoub El Wadi said that bids should be submitted by mid July 2008. Mr Sakr said that prices for any gas discovered would be agreed between Ganoub and the contractor after the discovery of the gas and based on market prices. He added that "Our gas or oil prices are directly linked to the spot market price."
Mr Sameh Fahmy Egyptian oil minister has said that Egypt plans to increase its oil output by 100,000 barrels per day to 800,000 barrels per day in 2008 by developing recent discoveries in the Gulf of Suez and the western desert. Production has declined from peak levels of close to 1 million barrels per day in the mid 1990s.
Egypt has become a significant exporter of natural gas, both by pipeline through Jordan and in liquefied form by ship.
Pakistan to invite bids for power plant in 2 to 3 months
The News reported that Pakistan will use international competitive bidding to generate power from its coal reserves, estimated at 185 billion tonnes.
Dr Akhtar Awan member of Planning Commission said that bids for setting up coal fired power plants will be invited after 2 to 3 months, by which time the prerequisite procedure is expected to be completed.
Mr Awan said that previous plans to produce electricity using vast coal reserves available in Pakistan did not materialize due to the involvement of high costs, which require a similarly higher tariff. He added that "We should not worry about the cost now and Thar Coal Mining Company has been established to undertake production of 1000 MW."
Mr Awan said that China Machinery Import Export Corporation wants to mine coal from Sonda Jerrukh in Sindh for producing power. They have submitted a feasibility study and negotiations will soon start with NEPRA for determination of the tariff. He added that "CMC has asked for 9.7 cents per kWh, but I will make sure that the final tariff remains between 8.5 to 9 cents."
Mr Sayed Abbas Ali Shah former director general of Sindh Coal Authority said that Pakistan will have the first mechanized coal mining project, if the deal with CMC goes through. He added that the real costs lay with the excavation of coal.
Chinese HRC export offer likely to reach peak levels soon
It is reported that export offer for HR steel coil price is set to move up again in the next one or two weeks due to expected increase in domestic market and higher than expected overseas demand
On Shanghai market, price for commodity grade 4.75mm to 11.5mm*1500mm by Shagang is at CNY 5200 per tonne to CNY 5220 per tonne, that for 1800 wide at CNY 5500 per tonne to CNY 5520 per tonne. Low alloyed 1500mm wide HRC is being quoted at CNY 5450 per tonne which compares with CNY 5600 per tonne for 1800mm cargo. If we take Shanghai price for 4.75mm to 11.5mm*1500mm HRC as benchmark it is forecast to approach CNY 5500 per tonne.
As per report, tier two steel makers are offering commercial 4.5mm to 11.5mm HRC at USD 850 per tonne to USD 860 per tonne FOB but supply is tight. But traders also mentioned that it is not difficult to get tonnage May shipment as long as transaction price is up by USD 860 per ton FOB. The problem lies in whether the high price is sustainable and whether overseas buyers are willing to take material at the updated levels.
(Sourced from MySteel.net)
Mexico imposes temporary duty on Chinese HR sheet imports
According to the official statement from Mexico, they will implement a 29.27 percent tariff on hot-rolled sheets imported from China.
Mexico's economic secretariat is still investigating on China's HR products, but decided to implement a temporary duty on HR sheets with thicknesses between 0.187mm and 4.5mm and widths between 600mm and 3,048mm.
(Sourced from Yieh.com)
Chinese domestic price for coke price breaks CNY 2000 barrier
It is reported that coke producers in Shanxi Province have raised their EXW prices this month, owing to rising prices and tight supply of raw materials.
As per reports, price increment amounted to CNY 100 per tonne to CNY 200 per tonne and now the price for first grade coke quoted by some producers has surpassed CNY 2000 per tonne hitting record high.
As per report coking coal price has brought high pressure and squeezed coke producers' profit margins, hence producers have to pull up coke prices to maintain operations. In the meanwhile scant coking coal supply also leads to rising quotations.
Chinese 2008 nickel output expected to rise 17% in 2008
Platts cited official from Beijing Antaike, the state run non ferrous metals information provider, as saying that China's nickel output is expected to reach 250,000 tonnes in 2008 up by 17% from 214,000 tonnes in 2007.
The Antaike source said "The growth is mainly attributed to key nickel producers raising output to cater to stronger demand from the stainless steel industry. He added that while the government had scrapped the 1% import duty on imported nickel since January 1st 2008 lowering import costs, whether stainless steel producers would import more nickel would depend on market fundamentals.
According to customs data China imported 105,300 tonnes refined nickel in 2007 up by 8.2% from 2006. Most of it came from Canada, Russia and Australia.
Meanwhile, the Antaike source said that China's nickel exports were likely to fall below the 16,930 tonnes exported in 2007 because of higher costs from the 15% tax imposed since January 2007.
Chinese steel futures on track for launch in H1 of 2008
It is reported that the Shanghai Futures Exchange is anticipated to launch steel futures contracts on wire rod as early as the first half of this year after being held off for eight years.
The Exchange has applied for re launching the steel futures contracts on 6.5mm wire rod and rebar in 2000, but the proposal has been shelved for eight years, partly due to the strong resistance from domestic leading mills.
Wire rod has been picked as the first trading steel variety as domestic wire rod price has soared 25.6% in February and the product has witnessed dramatic price fluctuations due to wide application. Moreover, 6.5mm wire rod has been traded in the bourse once in 1990's, therefore, the regulators have gained some valuable experiences in the past.
Mr Luo Bingsheng vice secretary general of the China Iron & Steel Association voiced positive opinions regarding steel futures at a forum held by the Shanghai Futures Exchange last May. "It seems that it's a long-term trend to develop steel futures."
Market insiders explain that the increasingly volatile steel prices have prompted steel mills to reduce exposure to the market risk with steel futures, that's the root reason for the shift of their attitudes towards the steel futures.
(Sourced from MySteel.net)
Guangdong gets green light for Zhanjiang Steel complex
It is reported that Guangdong provincial officials have been wracking their brains to hammer out a plan to win approval from Beijing for Zhanjiang Greenfield steel project as Wuhan Iron & Steel has enthusiastically hailed receipt of approval for its Fangchenggang complex in neighboring Guangxi province on March 4th 2008.
Sources close to the provincial government reveals that Beijing has approved Guangdong's final plan which foresees that Baosteel will acquire Shaoguang Iron & Steel and Guangzhou Iron & Steel together the three will set up a joint venture headquartered in Guangzhou city in which Baosteel would have a controlling stake.
As per report this proposal has sorted out the tax apportionment a major obstacle hampering the steel complex. The Zhanjiang Steel Complex would pay tax to Shanghai, Guangdong Provincial government and even Zhanjiang municipal government in addition to the central government. Moreover, Shaogang promises to dismantle a small BF and converters under 20 tonnes while Guanggang will shut down all up and downstream facilities in Guangzhou. To win support for the new project, Guangdong province will eliminate about 10 million tonnes per year of crude steel capacity.
Guangdong provincial government reveals that the steel complex would help boost progress of a series of infrastructure projects. On March 20th 2008, the local government in Zhanjiang has convened a meeting to embark the construction work of diversion works, Maoming Zhanjiang Railway, by line Railway of East Island of Zhanjiang within this year. Moreover, the steel project is also expected to help underpin some down stream sectors. Guangdong provincial official told the reporters that the renowned Samsung automobile project might re launch after the steel project has been landed.
The provincial official is optimistic that Zhanjiang steel complex would give a boost to the economic growth both in the city and the province as a whole.
Rebar prices in Shanghai market to move up in April 2008
It is reported that Mr Wu Haiyun GM of Shanghai Baoqiao Steel Co said the current fluctuations in Shanghai's rebar market are normal and there will be an upward move in April 2008. Mr Wu said given previous jumps, present adjustments are quite natural and the II grade rebar has already slumped to CNY 4700 per tonne hitting the bottom line. He said his company is sourcing some 200 tonnes to 300 tonnes a day from the market.
Mr Wu gave following reasons explaining why the market would experience an upward course in April 2008.
1. In Shanghai, there will be 94 municipal engineering projects at cost of CNY 30 million to be constructed which is expected to expand steel demand, especially rebar.
2. The ex works price again exceeds the market price. The traders have sold out low priced resources and face higher purchasing cost for future sales. March 21st 2008 Shagang's ex works price for rebar is standing at CNY 5020 per tonne in contrast to market price of some CNY 4700 per tonne to CNY 4730 per tonne
3. The stock is not high, while new arrivals for next period will be limited. Rebar stocks in Shanghai is reducing by 50,000 tonnes during the past two weeks. In January to February China's outputs of rebar and wire rod posted 14.1254 million tonnes and 11.798 million tonnes up by 0.4% YoY and 1.2% YoY. In specific, Beijing, Tianjin, Shanxi and Jiangsu Provinces saw 10% decline for February daily output.
4. The raw materials remain high perched. Prices for power and coking coal stand firm amid tight supply, while billet and pig iron also keep steady, bolstering the ex works price and the market price consequently. Some smaller rerolling plants are cutting or suspending productions, so as to deduct future supply.
5. Price in the international market holds on a track. Export offer of rebar from CIS gained USD 180 per tonne last week. At present, the order price for April or May shipment is USD 920 per tonne to USD 930 per tonne while export offer already climb to USD 950 per tonne to USD 960 per tonne. In other regions of Europe, the local sales price gained some EUR 30 per tonne to EUR 570 per tonne to EUR 600 per tonne compared with EUR 540 per tonne to EUR 570 per tonne two weeks ago.
(Sourced from MySteel.net)
Bayi Iron & Steel to start new plate mill by 2008 end
It is reported that China’s Bayi Iron & Steel new plate mill will start trail production by end of this year. The new plant is capable of producing 650,000 tonnes of medium and heavy plate per year.
China’s Bayi Iron & Steel received the plate making facilities from Pudong Steel in last October and proceeded to reinstall, integrate and upgrade the facilities.
Baosteel commits CNY 400 million funding in Chengdu
It is reported that Chengdu economic & tech Development Park signed CNY 12 billion worth of industrial items with Kobelco, Baosteel and Toyota, marking an acceleration of local machinery manufacturing sectors such as Chengdu made automobile, the supported facilities and loader.
As per report, Baosteel Group signed an investment of CNY 400 million into auto parts, steel and other metals' processing and distribution, While Toyota agreed to expand auto making and would devote to research and development of finished vehicle.
TISCO cooperates with world-renowned welded pipe enterprise
It is reported that recently, TISCO International Trade Company and BUTTING Group, which is a German famous welded pipe enterprise signed an order for 750 tonnes medium plate. It is the second time for the two sides to carry out cooperation and also the deepest level of cooperation with TISCO for BUTTING Group after it entered into Chinese market.
Germany BUTTING Group was founded in 1777, is a professional welded pipe production enterprise with 230 years history. It produces more than 40,000 tonnes of stainless pipelines, tubes and containers every year, its pipeline forming, welding and heat treatment technology rank top level in European senior professional stainless steel pipe industry.
As per report, the Germany headquarter and the main branches mainly purchased stainless from European stainless plants before, the choice to cooperate with TISCO dues to the international competitive advantages TISCO’s stainless products, as well as the future prospects for the two sides.
4 die in China rail tunnel cave in
Xinhua reported that 4 workers were killed and another injured after a tunnel collapsed at a railway construction site in northern China early on Tuesday.
According to the region's safety supervision administration rocks and earth caved in at about 4 AM as workers were digging a new tunnel over a section of the Baotou-Xi'an Railway running through Ordos city in the Inner Mongolia Autonomous Region. No further details were immediately available.
Local officials were rushing to the site and investigators were trying to discover the cause and the number of workers on duty at the time.
Construction of the 800.9 kilometer railway began in November. The line will mainly carry coal, linking Baotou in Inner Mongolia and Xi'an, the capital of Shaanxi Province, with stops in Ordos, Yulin and Yan'an.
Egang produces stamping grade CR sheets
It is reported that recently, Egang CR sheet plant has successfully produced stamping grade CR marking that Egang’s CR products has reached double high from general area.
Stamping grade CR sheet is different from the general home appliance’ CR plate, it mainly be used in the manufacturing of automotive parts and products need to press molding. It requires good surface quality, and excellent mechanical properties, especially stamping molding properties.
Taiyuan Steel hikes April prices for HR products
It is reported that Shanxi based Taiyuan Steel raises April prices for HR products by CNY 350 per tonne on the basis of its March prices.
Latest EXW price is offered at CNY 4790 per tonne for Q235 3.0mm HRC and CNY 4710 per tonne for Q235 5.5mm HRC.
Prices listed above are exclusive of 17% VAT effective as of March 24th 2008.
(Sourced from MySteel.net)
Laiwu Steel reports 48.11% rise on net profit last year
Laiwu Iron & Steel Company Ltd has seen sales revenue up by 22.01% YoY to CNY 32.92 billion, total profit up by 34.94% to CNY 1.58 billion and net profit up by 48.11% to CNY 1.14 billion last year on back of healthy market demand and competitive product offerings.
Its steel output only grows 2.7% while the steel product price jumps 18.8% in 2007. The company has raised up the gross profit margin by 1.68 percentage points since it has made greasy profits from section and premium steel products.
Laiwu Steel boasts annual capacity of 6 million tonnes and ranks as the leading producer of both section steel and carbon steel. It produced 3.3 million tonnes of H-beam last year taking up 38.48% of the domestic market. H-beam has contributed 27.12% of its sales revenue last year as opposed to 18.36% in 2004. Meanwhile, less profitable carbon steel has only accounted for 41.76% of its earnings last year down from 59.75% in 2004.
Laiwu Steel has stepped up production of high end premium steel products over the years. It has risen to the biggest pinion steel producer in China and established close ties with major clients such as FAW, Ford and Dongfeng Motors.
(Sourced from MySteel.net)
Chinese seamless pipe prices to jump
It is reported that China’s seamless pipe producers are asking for another increase USD 200 per tonne to USD 300 per tonne.
Besides, Japanese manufacturers have increased price by USD 200 per tonne. All mills and traders can assure that the price will increase in near future.
Some market participants predicted that the price will be increased by at least USD 30 per tonne and the average price will reach USD 1,130 to USD 1,160 per tonne.
9 jailed for 2005 coal mine blast
Xinhua reported that 9 coal mine managers were sentenced to between two and six years in jail for a coal mine blast that killed 108 miners and injured 29 others in north China's Hebei Province.
According to a Kaiping District People's Court ruling on Tuesday afternoon Mr Shang Zhiguo head of the Liuguantun colliery was sentenced to six years in jail for committing a major workplace safety crime. Mr Li Qixin deputy head, who was also in charge of production safety was jailed for five years on the same charge. Mr Zhu Wenyou coal mine investor and Mr Lv Xuezeng head of the mine safeguard department were jailed for three years each. Mr Liu Wencheng chief of mine ventilation department was jailed for fours years. Another four managers were sentenced to between two and four years in jail.
No defendants appealed the judgment.
The gas explosion happened at the Liuguantun Coal Mine in Kaiping District of Tangshan City at 3:30PM on December 7th 2005. The gas blast was a serious accident caused by the illegal operation of the mine as the coal mine was still under construction and did not have a production license before the accident happened. An investigation revealed that the original design of the coal mine had been changed without approval. The altered designed, which neglected safety considerations, allowed the exploitation from eight directions for a single coal layer without proper ventilation or gas surveillance systems. The coal mine, formerly state owned and with a designed annual production capacity of 300,000 tonnes, was privatized in 2002.
Chinese power output in 2 months up by 11.3% YoY
XFN-Asia reported that China's major power plants produced 516.9 billion KWH of electricity in the first two months up by 11.3% YoY.
The China Electricity Council said the growth rate was down by 5.3 % YoY partly due to the severe snowstorms in mid January. Of the total, coal fired power plants produced 452.7 billion KWH of electricity up by 10.7% YoY, hydropower stations produced 47.86 billion KWH up by 9.7% and nuclear power stations produced 10.53 billion KWH up by 38.6%.
The council said power consumption stood at 523.9 billion KWH during the two months up by 11.93%.
Severstal becomes 4th largest steel producer in US
RIA Novosti reported that Severstal estimates after the purchase of ArcelorMittal’s Sparrows Point steel mill in the United States, it has become the 4th largest steel producer in the US with 8 million tons per year after ArcelorMittal, Nucor and US Steel.
Severstal has been buying up American steel holdings since 2004 and now has a subsidiary there Severstal North America.
Aricom buys two iron ore license near existing projects
It is reported that UK based mining company Aricom Plc, which mines for iron ore and titanium in Russia, has agreed to buy two licenses for resources near existing projects for USD 80 million in cash and shares comprising of USD 40 million for each asset.
Aricom would pay USD 22.5 million in cash immediately for options to buy the licenses and would begin an extensive exploration program on the properties soon.
Aricom in a statement said that the two licenses are for areas that contain six ore bodies. It said that “The Garinskoye Flanks and Kostenginskoye licenses offered significant natural expansion potential" to the company's K&S and Garinskoye iron ore projects.”
Mr Jay Hambro CEO of Aricom said that the new assets would nearly double the company's attributable reserves and resources.
NLMK order for modernization of HSM finishing area
NLMK has placed an order with SMS Demag of Germany for the further modernization of the finishing train of its hot strip mill. The aim is to improve the dimensional accuracy of the hot strip in respect of thickness, profile and flatness.
The modernization includes the installation of the CVC plus® system and of new work roll bending systems in stands F2, F6 and F7. In addition, stands F1 to F4 are to be equipped with hydraulic roll gap adjustment systems and a new profile, contour and flatness control system will be installed for the finishing mill. Upon completion of this order all finishing stands will possess not only hydraulic roll gap adjustment systems but also CVC plus® technology.
All revamping work will take place during the regular maintenance shutdowns and therefore there will be no need for any additional interruptions to production. The modernization work will be completed in 2011. The new order dovetails smoothly with the series of revamps carried out by SMS Demag during the last few years on the Hot Strip Mill 2000 at Lipetsk in Russi